Industry Forum: Towards Code 15
04 May 2021, Jo Prowse, PSA Chief Executive
Thanks to all of you who attended our forum last week. While an online event isn’t quite the same as meeting in person, we thought it was great opportunity to engage with you and to answer lots of your questions. Should you wish to refer to our slide deck, you can find it here.
As we build towards a new Code, I thought I would pick up on some of the common themes we saw in your questions.
Many of you have picked up that we’re proposing to introduce a Due Diligence, Risk Assessment and Control standard through Code 15. We want to ensure that everyone in the market is taking their responsibilities in this area seriously and have the necessary processes, policies and systems to underpin this.
For those of you in the market, with good processes, policies and systems in place this shouldn’t be onerous – and we will be here to help you make any necessary tweaks to your approach in a supervisory capacity. But we do know that there are pockets of poor practice in the market that will need to improve to meet the requirements of Code 15. This will also help ensure a more level playing field in the way DDRAC is performed across the industry which was a key message we took away from our earlier stakeholder engagement activities.
- Industry engagement and supervision
One of the key objectives of Code 15 is to enable us to work with industry to prevent harm from occurring where we can. Our proposal to introduce a supervisory role is with this intention; we want to work with you to build in compliance and reduce the risk of harm developing. Supervision will be targeted, evidence-based, focused on risk and cooperative in approach.
We currently have 21 pieces of guidance under Code 14, many of which we think would no longer be required under Code 15. Whilst the guidance under Code 14 has needed to be sufficiently prescriptive, often leading to additional requirements, this has not always had the desired effect of supporting compliance with the Code.
Under Code 15, we want guidance to do just that and enable good services that meet consumers expectations. It isn’t intended to hinder or restrict but to help you comply. We also don’t have a fixed view on how many pieces of guidance will be helpful, and we are interested to hear your thoughts on where guidance can provide further clarification on Code standards.
Because guidance is intended to be enabling and supportive, our aim is to consult on guidance in the autumn.
- Flexibility and change
Code 15 is intended to provide certainty and stability. It has been built with a mature market in mind. Having said that, Code 15 does allow us to tailor regulation should it get in the way of good services. Through supervision, we intend to work with networks and intermediaries to bring services to market in a consumer-centric and compliant manner.
- Speed and efficiency
We acknowledge that our current approach to enforcement can be perceived as slow. And while Code 15 is intended to prevent harm in the first place (and therefore reduce the need for high numbers of lengthy formal investigations), it also should enable us to enforce in a smarter way. Code 15 gives us more enforcement tools, including new engagement powers that should allow for swifter resolution of issues, which will benefit consumers, industry and regulator.
We’ve worked hard in recent years to reduce our costs, taking £1 million out of our budget in real terms. We will continue to look for efficiencies where possible, but our primary focus is fulfilling our regulatory role in protecting consumers and we must be adequately funded to do that.
- App stores
We got a few questions about how we regulate app stores, which are an important part of the market. We estimate that app store revenue is a shade over a fifth of the total market – a sizeable chunk, but not as high as some suggest. The short answer is that they are and will be regulated and responsible for complying with the Code, just like everyone else. And just like everyone else, we will look to be flexible in how we regulate to allow for services to be offered in the consumer interest.
For these reasons – and those we set out in our consultation and at the forum – we believe Code 15 will be transformative. It will benefit consumers by preventing harm in the first place and driving up standards across the market, benefit industry by being simpler to comply with and benefit the PSA by enabling smarter enforcement. It will also address some of the issues that have challenged us in our current regulatory approach. We look forward to working with you to implement this as soon as practical after the consultation.
No doubt you will have more questions. As we said on the day, we’re keen to hear from you either through the formal consultation, our Code webinars or individual meetings. Do please get in touch.
You may also be interested in Ofcom’s consultation on approving our Code.